SMEs continue to be a key focus area for the European agencies to fuel growth and enhance economic freedom for its citizens. Various policy tools and initiatives have been designed with an aim to level the playing field and make it easier for SMEs to compete with the big conglomerates using their limited resources. These tools may be termed as force multipliers and they are made possible through a combination of policy decisions and technological advancements.
One such powerful toolset that we have talked about previously is eIDAS. We have covered how eIDAS can help SMEs grow and prosper and how it can help solve some of the challenges faced by SMEs. One of the key challenges that we identified was awareness amongst SMEs. A recent study carried out for the European Commission in eight Member States has reached similar conclusions. The report states that, “even though most of the SMEs involved in the initial survey had heard of some of the eIDAS solutions, they did not have a deep understanding of these solutions”. Only 17% of the respondents had already used eID or trust services in their business. Lets dive deeper into some of the issued identified in the report.
This can be looked at as both a challenge as well as an opportunity. On one hand the adoption rate is low, but on the other hand it just means that there is still a vast untapped market for solution providers to go after! About 50% of the respondents stated that they were indeed interested in further digitizing their business and this represents a portion of the SME population that can be counted on to get onboard if provided with the right solutions and the right information. Another 20% were not sure and this would be the population that needs to be targeted by the EU’s efforts on information dissemination as well as other initiatives like their hub and spoke* model for eIDAS adoption.
(* The hub and spoke model is briefly discussed here and it essentially means “that a large local company acts as the hub and early adopter of eIDAS and then spreads the necessary information to its various vendors and partners.”)
In addition to the challenge of low awareness, the next challenge that the study identified was limited resources. Electronic identification and trust services enabled by eIDAS are true force multipliers – they are designed to allow businesses and consumers to do more with less. Once implemented, they should provide more security, more legal certainty and a better user experience at a lower cost. However, SMEs are understandably cautious about taking the leap. They don’t have access to cheap sources of finance or the manpower to invest in new solutions. Which means they are often more risk averse and understandably cautious.
The study found that here too one of the main issues was a lack of communication. They found that SMEs needed tangible case studies to feel comfortable rather than a simple listing of the pros and cons. Such an attitude is understandable since SMEs are always looking at things from a practical implementation standpoint rather than any potential gains on paper. Again, the onus is on the European agencies and private market solution providers to build these case studies and presents them to the market.
We shall continue this discussion in Part 2 and take a look at some of the recommendations of the study and how some sectors seem to be doing better than others.
References and Further Reading
- Benefits of the eIDAS Toolbox – Case Studies from Various Industries (Part 1) (2018), by Gaurav Sharma
- Benefits of the eIDAS Toolbox – Case Studies from Various Industries (Part 2) (2018), by Gaurav Sharma
- Digital Trade and Trade Financing - Embracing and Shaping the Transformation (2018), by SWIFT & OPUS Advisory Services International Inc
- REGULATION (EU) No 1316/2013 establishing the Connecting Europe Facility, amending Regulation (EU) No 913/2010 and repealing Regulations (EC) No 680/2007 and (EC) No 67/2010(12/2013), by the European Parliament and the European Council
- Selected articles on Electronic Signing and Digital Signatures (2014-today), by Ashiq JA, Gaurav Sharma, Guillaume Forget, Jan Kjaersgaard , Peter Landrock, Torben Pedersen, Dawn M. Turner, and more
- Selected articles on Authentication (2014-today), by Heather Walker, Luis Balbas, Guillaume Forget, Jan Kjaersgaard, Dawn M. Turner and more
- eIDAS webinar 1: Using electronic Identification, Authentication and trust Services for Business (2018), by the European Commission
- The European Interoperability Framework - Implementation Strategy (2017), by the European Commission
- Proposal for a DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL amending Directive (EU) 2015/849 on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing (2016), by the European Commission
- REGULATION (EU) 2016/679 on the protection of natural persons with regard to the processing of personal data and on the free movement of such data, and repealing Directive 95/46/EC (General Data Protection Regulation) (2016), by the European Parliament and the European Council
Proposal for a REGULATION concerning the respect for private life and the protection of personal data in electronic communications and repealing Directive 2002/58/EC (Regulation on Privacy and Electronic Communications), (2017), by the European Parliament and the European Council
- Revised Directive 2015/2366 on Payment Services (commonly known as PSD2) (2015), by the European Parliament and the Council of the European Union
- REGULATION (EU) No 910/2014 on electronic identification and trust services for electronic transactions in the internal market and repealing Directive 1999/93/EC (2014) by the European Parliament and the European Commission
DIRECTIVE 2013/37/EU amending Directive 2003/98/EC on the re-use of public sector information (2013) by the European Parliament and the Council